Daily currency volumes fall to lowest since 2006

ICAP Plc said currency-trading volumes on its EBS electronic platform fell 4% last month to the lowest level since at least 2006.

The average daily foreign-exchange volume dropped to $91.8 billion from $95.7 billion in December 2011, ICAP said today in a statement on its website. The level climbed as high as $274.2 billion in September 2008, according to data on its website starting in January 2006.

Average daily volumes in fixed-income products on the company’s BrokerTec trading platform rose 5% from a year ago, the company said.

The decline in currency volumes comes as the combination of interest rates at or near record lows in the U.S., Europe and Japan reduce price swings among the dollar, euro and yen, the three most-traded currencies.

“There’s been a significant fall in foreign-exchange volumes across all platforms over the past couple of quarters,” said Michael Derks, chief strategist at FxPro Group Ltd. in London. “The reduced currency volatility means traders aren’t seeing the opportunities. There’s no real incentive to be taking big positions in major asset classes and that may continue for a while longer.”

JPMorgan Chase & Co.’s G7 Volatility Index declined to 7.06 on Dec. 18, the lowest level since August 2007. It was at 7.82 as of 2:01 p.m. London time. The index has averaged 12.3 during the past five years.

ICAP reports all of its electronic broking volumes on a single count basis. Average daily volumes for December are calculated based on 21 business days, with public holidays included. Bloomberg LP competes with ICAP in offering foreign- exchange trading.